The Path to Low Carbon Hot Water

When it comes to tracing a path to low carbon hot water, the design of applications for commercial hot water systems has remained remarkably consistent and if a building is more than ten years old it is going to be built around either a condensing gas water heater or an indirect water heater and boiler. Gas-based hot water systems were specified because this was the most cost-effective and cleanest way of producing high-temperature hot water.

In the past decade though we have seen a seismic shift in thinking driven by the wide acceptance of the harmful effects of global warming and a need to address its root causes. This solidified with the introduction of the Climate Change Act in 2008, and the subsequent drive to make the UK net zero by 2050. With the resultant closure of coal-fired power stations and increasing dependence on wind and solar, the carbon intensity of grid electricity has reduced in line with gas, which has, in turn, remained relatively static since the 1990s.

With the Government’s aggressive new Net Zero Strategy, despite similar carbon intensities for heating from either gas or electric, the latest regulations as outlined in the Heat & Buildings Strategy will deem gas systems alone to be too carbon polluting in commercial-scale buildings. So what path to low carbon hot water can you take? To decarbonise domestic hot water (DHW) applications there are currently two core technology options, air source heat pumps (ASHP) or solar thermal. Although both can provide low or zero-carbon heat, neither can fully replace an existing water heating system. Since commercial DHW systems must operate in excess of 60°C to prevent the threat of legionella, ASHP efficiency, designed to work with lower temperatures, rapidly falls away limiting supply. Solar thermal on the other hand is limited by the sun’s availability across the year, and it is worth remembering will not provide space heating either. However, both can be used as a source of preheat to reduce energy use. Both will work equally well with after heat provided by either gas or direct electricity.

Choosing the right path to low carbon hot water for your building

For buildings already on gas and that rely on large amounts of DHW – a large proportion of current commercial UK properties – solar preheat is the preferable option. Depending on the site and energy consumption habits, solar thermal will typically provide around 30% of the hot water demand.

For new build properties, the expectation is for specification to default to a mixture of heat pumps and direct electric afterheat. For new commercial builds, consultants are specifying for greater electrical load to account for the additional power demands. This though is a costly addition for legacy properties wanting to introduce electrification for higher demands of hot water and heating.

The electrification of buildings is the most common vision, and one the Government is driving with its aggressive target to achieve 600,000 new heat pump installations every year by 2028. Many of these will be for domestic properties, but a considerable proportion will be expected to be introduced via commercial projects. New DHW systems will predominantly follow this model, taking advantage of heat pump performance efficiencies to create a hybrid approach to deliver pre-heating for as much as 75% of the water in a direct electric system. And with no gas to the building, no local generation of NOₓ and no flue to install this clearly has its advantages. This is certainly why the government is championing this technology as the preferred path to low carbon hot water and heating.

However, this approach does not factor in running costs.  While the grid may have reduced its carbon, its cost per kWh has risen consistently over the past two decades. Gas prices on the other hand have remained essentially static until the latter quarter of 2021.  Of course, a proportion of the grid electricity is still generated by gas-fired power stations, so electricity charges also spike in response to any upward fluctuation in gas price. Despite the ASHP performance efficiencies, this has meant the running costs still increase approximately three times due to the difference in current gas/electric prices. For smaller hot water demands in new builds, where the need for a gas supply has been avoided, that additional cost may be acceptable. And we certainly see larger organisations faced with ESOS audits and SECR reporting be willing to absorb the increased running costs to introduce sustainability into their properties as a part of their corporate net zero policy.

Commercial sites with existing gas should really look at continuing to use it. Ten years ago, it was very difficult to argue for introducing solar thermal because the numbers really did not stack up against the price of gas. The capital costs of installation and maintenance versus the operational savings meant many early projects failed to recoup their investment, even with the support of RHI.

Today we are in a very different situation, and if electrical costs can be offset, then the numbers really start to look favourable for adopting solar thermal. A ten-year return on investment becomes very achievable and the property gains undisputed carbon and cost savings. Additionally, the current generation of condensing gas water heaters incorporate features such as flow regulation to automatically optimise the supplied output from the heat exchangers ensuring maximum efficiency. Models with multiple integrated heat exchangers offer load balancing for optimal long-life operation and inbuilt redundancy guaranteeing continuity of service. Those offering titanium-stabilised stainless-steel construction are also highly resilient; meaning warranties on the heat exchanger and burner components can be as much as a decade and operational lifespan should easily be 15+ years. That places replacement well into the early to mid-2030s and that is important because it means gas infrastructure remains in place for adaption to the next generation of hydrogen-based gas supply. The Government expects this will be a core component for meeting net zero at a national level, especially for buildings with higher energy demands. With hydrogen policy to be confirmed in 2026, retaining gas in existing commercial buildings keeps options open and future-proofs a building for other emerging heating technologies.

While we must all recognise the importance of excluding fossil fuels from future commercial systems and advocate all-electric systems for new builds, it is important to understand the implicit costs and difficulties of retrofit and replacement of systems throughout the thousands of legacy commercial buildings that define the UK’s urban landscape. The hybrid approach is unavoidable for commercial projects seeking a path to low carbon hot water and is the most sensible, practical, and cost-effective option. Whether all-electric or using gas after heat, commercial organisations can actively drive sustainability and retain control of operational expenditure for decades to come.